Question

Analytical procedures of controls in auditing purchases ,sales,fixed assets and creditors.

Answer 1

1. Purchase

a) Compare with previous year amount

b) Compare with ratio of purchase and inventory of previous year

c) Compare the ratio with total cost of goods sold and salea with purchase

d) Compare the creditors ratio with purchase

e) Compare with budgets

2. Sales

a) Compare with budget

b) comparison with prior period amounts

c) comparison with competitors sales

d) Compare Gp ratio

f) Compare ratio with debtors and also current ratio

3.Fixed Assets

a) Reconcilation of with previous year balance with current year changes , depreciation etc

b)Reconcile book value of assets to fixed assets register

c) Compare the deprecation to total fixed assets

d) Compare return on assets ratio

e) comparison of maintenance and repair costs

4) Creditors

a) payables balances against other periods to check any unusual increase or decrease

b) Comparing individual balances with relative expenses

c) Ratio with credit purchase shoud review

d